Dubai property defies view as prices climb in H1

Dubai property defies view as prices climb in H1
Jumeirah Beach Residence is a popular investment choice for buyers of holiday homes in Dubai.

Infrastructure projects for the upcoming Expo 2020 would create sustainable stability for real estate prices in Dubai.



By Staff Report

Published: Sat 15 Aug 2015, 12:00 AM

Last updated: Sun 16 Aug 2015, 9:57 AM

Dubai property prices have registered an average annual increase of 2.5 per cent in the first half of 2015, according to Al Ruwad Real Estate Consultants.
The sector has defied expectations since international reports claimed Dubai's real estate prices would fall by 20 per cent in the beginning of 2015.
According to Dubai Land Department data, the volume of real estate sales in Dubai surpassed Dh129 billion during the first six months of the year, said Ismail Al Hammadi, founder and chief executive officer, or CEO, of Al Ruwad Real Estate Consultants. This compared to Dh57.6 billion during the same period last year.
Around 20,000 investors belonging to 142 nationalities pumped in nearly Dh53 billion into Dubai real estate from January until June. The month of June alone witnessed sales worth Dh1.2 billion.
A global economic slowdown, falling oil prices, the rise in the value of US dollar and the decline of other currencies such as the Russian rouble were expected to weigh down on Dubai property prices. These fears were reinforced by a segment of investors selling their properties to take advantage of the exchange rate and achieve higher returns.
"Despite residential property prices decreasing at first, they then rose to three per cent in the second quarter. This is more than the annual growth rate of 2014 which was 2.5 per cent," Al Hammadi said.
Developers have now realised the potential of affordable housing and launched projects for low-income families. Such projects can revive the property market, he said.
"Several huge projects that have seen the light of day provide for more flexible options in terms of prices. Some such projects were fully sold in less than a day of launch, with easy settlement options of one per cent interest over seven years," Al Hammadi added.
Citing Emaar Properties as an example, the CEO said the presence of the world's largest companies in Dubai would support the real estate sector across the medium and long term.
One of the world's largest real estate development companies in terms of value, with its assets touching Dh159 billion, Emaar accomplished a net profit of Dh2.2 billion during the past six months, an increase of 12 per cent from last year.
Al Hammadi said Damac Properties' mid-term profit jumped to Dh2.7 billion, with its shares scaling the highest price level since listing. Al Hammadi linked the positive momentum of the Dubai Financial Market to property shares.
Infrastructure projects for the upcoming Expo 2020 would create sustainable stability for real estate prices in Dubai. Al Hammadi mentioned the launch of Meydan One, which will host housing, commercial and tourism projects to be built across 3.6 million square metres. The project includes the Dubai One tower, the tallest residential tower in the world at 711 metres.
Dubai will also host the tallest commercial tower in the world, Burj 2020, in Jumeirah Lakes Towers.
The Expo requires investments in infrastructure worth $8.8 billion and returns will amount to $23 billion, according to the Bank of America Merrill Lynch.
Al Hammadi said the deregulation of oil prices has a positive impact on the real estate sector, especially since diesel prices have been reduced.
He added that the declaration of Mohammed Bin Rashid Al Maktoum Foundation that its loans portfolio amounted to Dh6 billion would further deepen the strength of the Dubai property sector.
He said: "It's no secret that the Dubai market in particular, and the UAE in general, has great potential in terms of its value of real estate assets. For example, it's about 122 per cent higher than Singapore."
Al Hammadi said the real estate sector is a key contributor to Dubai's gross domestic product, or GDP.
Al Hammadi expressed his optimism about the future of the emirate's real estate sector as Dubai turns into the capital of global events, proving the need to improve infrastructure to keep pace with growing demand.
- business@khaleejtimes.com


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